Your Questions: Answered - Written by on Wednesday, July 25, 2012 14:18 - 3 Comments

Ask Peter: Local sponsorship request causes headache – CEO Mabey Group answers your questions

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Dear Peter,

I run a manufacturing business in the South West.  Our customers are mostly UK based and one of them has asked us to sponsor a local sports team.  The sponsorship is just over £10,000 and the client is important to us.  What would your approach be to this?

Peter’s answer

This request makes me very nervous. I have no problem with a company providing sponsorship to local sports teams, especially youth teams. I have agreed to buy several kits for such teams in the past, almost all with a direct connection to an employee, such as a son playing in a local under 11’s football team.

The cost is generally well below a £1,000 and the instigator either an employee or other local person with no commercial connection to the business. This is good for the community and with a few photographs can be used as positive PR for the business. As soon as the request comes from a customer, or potential customer, then I am concerned.

I have to assume that the team in question has some ‘value’ to the person requesting the payment, either a personal interest in the team or possibly a desire to be seen by others in the community to be gathering sponsorship for a local ‘good cause’, increasing the persons ‘standing’ in the community.

Either way I would not wish to get involved with such a large sum, even if it proved to be entirely innocent it could do significant reputational damage if it was discovered by the press.

However, if the individual had, for example, forwarded details of a local charity which is seeking donations and for which he was intending to ‘run a marathon’ or similar, then I could be sympathetic to a small donation, assuming that such a payment did not coincide with the potential award of a new contract.

My usual approach to such requests is to apply the ‘local paper’ rule, which is, how would I feel about answering questions about the donation or sponsorship from a local journalist? Would I be embarrassed in any way by the payment?

The request for £10,000 as described would fail this test every time.

 

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Dan Aitch
Aug 6, 2012 0:37

£10k is a significant sum but, when viewed against the cost of your local American football team (as an example), is peanuts.

A team with a squad of 40-50 players who all need kit and uniforms, travel across the country, play and train at facilities that have to be paid for, use medical equipment (strapping tape, etc,) pay for referees and insurance, week in and week out, find that their costs soon escalate. Most British American football teams expect around £400 FROM each player, per year, towards costs. This is an entirely amateur sport that gets little local publicity or support from local or national media or businesses. I am aware of teams whose costs for the year (especially if they also have junior teams), rise above £50k per season. In light of this, £10k seems reasonable, e.g. this weekend a London team have to travel to play a national semi-final in East Kilbride in Scotland, accruing coach hire costs in excess of £3k, for a single game! Not to mention accommodation and other expenses. This on top of overseas trips to play in European competition, all managed without a sponsor and drawing funds from the pockets of the players, coaches, trainers and other team assistants.

Your local junior soccer team might start wearing gold-plated boots for £10k but, if it can be seen as reasonable or justified, and isn’t likely to cause you to receive some undue benefit or reward (and you can afford it), sponsor this other team; go on.

This is not qualified legal advice, but then you knew that already. :-p

If it’s not American football, leave them well alone. 😉

And there endeth the party political broadcast on behalf of the British American football community. More sponsors please.

Dan Aitch
Aug 20, 2012 23:37

It would seem that the eventual cost of the coach to East Kilbride was a lot more than £3k, but thankfully the £0.5m vehicle was insured – http://www.dblcoverage.com/2012/08/12/london-blitz-bus-blaze/

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